Steven Peikin, Co-Director of the SEC’s Division of Enforcement gave an encyclopedic description of the Remedies and Relief in SEC Enforcement Actions at PLI’s White Collar Crime symposium. The speech was meant to address the effectiveness of enforcement actions. He wanted to point out that the number of enforcement actions or the total amount of penalties are not good metrics for assessing the work of the enforcement division.
The speech looked at all of the remedies available and how they address the mission of the Securities and Exchange Commission.
Undertakings – Specifically target and attempt to address specific risks
He gave the example of Tesla and Elon Musk. The undertaking to control Musk’s corporate communication was to address the “the potential harm to investors caused by Musk’s communication practices and a lack of sufficient oversight and control of those communications.”
Bars and Suspensions – serve a critical prophylactic function
They preserve the integrity of the markets and protect investors by limiting the activity of known bad actors by removing them from the industry or preventing them from serving as officers or directors at public companies.
Penalties – serve as a deterrent
“Penalties are one of the primary enforcement tools we have to incentivize regulated entities to remain in compliance with the rules that protect investors.”
Disgorgement – Even where a defendant “cooperates and agrees to meaningful undertakings, it should not be entitled to keep its ill-gotten gains, which we are often in a position to restore to harmed investors.”
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